Q: Please provide comments on their latest results and their current debt vs equity position. With a 17% drop after reporting their results, do you think the drop is overdone? Would you continue to hold or sell for tax loss?
5i Research Answer:
We would be comfortable selling. The company is small, cyclical and has a levered balance sheet. EPS of 44c missed estimates of 83c; revenue of $481M missed estimates of $525.7M. EBITDA of $37.4M missed estimates by 24%. Revenue fell 5.7%. EPS fell by more than half and backlog fell by 2%. The company noted 'softer than anticipated demand'. We doubt it does much in the short term.